The European Medicines Agency's Committee for Medicinal Products for Human Use recommended for approval Eli Lilly & Co. and Incyte Corp.'s baricitinib.

The drug, which would be marketed as Olumiant if approved, would be indicated for the treatment of moderate to severe active rheumatoid arthritis in adult patients who have responded inadequately or are intolerant to one or more disease modifying anti-rheumatic drugs.

Baricitinib is now referred for final action to the European Commission, which grants approval in the EU.

The committee's recommendation is based on five phase 3 clinical trials of baricitinib in adult patients with moderate to severe active rheumatoid arthritis.

In December 2009, Lilly and Incyte signed an exclusive worldwide license and collaboration agreement for the development and commercialization of baricitinib and certain follow-on compounds for patients with inflammatory and autoimmune diseases.

Lilly's $65 million milestone payment to Incyte upon a positive opinion from the committee will now be triggered by the granting of marketing authorization by the European Commission due to a recent amendment to the agreement.

Baricitinib was submitted for regulatory review seeking marketing approval for the treatment of rheumatoid arthritis in the U.S., EU and Japan in the first quarter of 2016, and is being studied in phase 2 trials for atopic dermatitis and systemic lupus erythematosus.